I am in agreement with many of the good answers above but as an alternative you might consider using the Safe Harbor for Home Office Deduction.
This is a simplified method for figuring your home office deduction. If you choose to use this method, you cannot claim home office expenses using the regular method. The simplified method doesn’t change who can claim it, but it does simplify your calculations and records.
Highlights of the safe harbor home office deduction:
- Standard deduction of $5 per square foot of home used for business up to 300 square feet (with a maximum deduction of $1,500)
- Allowable home-related itemized deductions you claim in full on Schedule A (Ex: mortgage interest and real estate taxes)
- No home depreciation deduction or later recapture of depreciation for the years you use this method
Additional considerations for selecting the Safe Harbor method:
- You may choose to use either the simplified method or the regular method for any taxable year.
- You choose a method by using that method on your timely filed, original federal income tax return for the taxable year.
- Once you have chosen a method for a taxable year, you cannot later change to the other method for that same year.
- If you use the simplified method for one year and use the regular method for any subsequent year, you must calculate the depreciation deduction for the subsequent year using the appropriate optional depreciation table. This is true regardless of whether you used an optional depreciation table for the first year the property was used in business.
Full details on the new option can be found in Revenue Procedure 2013-13 PDF.
